Rural round-up

August 21, 2014

Increases for fish stocks show success of QMS:

Primary Industries Minister Nathan Guy has announced increases to catch limits for a range of New Zealand fisheries today, thanks to healthy stock levels.

“This shows the success of our world-leading Quota Management System (QMS). It is flexible and driven by science, which means that we can increase take as stock levels improve,” Mr Guy says.

Healthy stocks have led to increased Total Allowable Catch (TAC) limits for:

• Hoki 1 (10,100 extra tonnes across New Zealand)
• Orange Roughy 7A (1155 extra tonnes on the upper West Coast)
• Orange Roughy 3B (525 extra tonnes around the lower South Island) . . .

Just what the doctor ordered, no way or only a matter of time? - Allan Barber:

There are three possible responses to the prospect of an overseas, probably Chinese, investor buying seriously into the New Zealand meat industry: bring it on, not on your life or it’s inevitable.

So far Chinese interests have recently bought a minority stake in Blue Sky Meats and an application to buy Prime Range Meats is with the Overseas Investment Office; ANZCO is just under 75% Japanese owned with New Zealand management and staff holding the balance. ANZCO’s ownership structure has remained like this for over 25 years bringing positive benefits to the company, its suppliers and New Zealand as a whole. . . .

Back to the future? – Andrew Hoggard:

I am going to propose something provocative.  The big long term issue for us isn’t going to be water but will be employment and occupational health and safety. 

While the mention of water and farming gets some people worked up, the truth will eventually break through the spin and I think we are just starting to see this.  When it comes to employment matters though, our industries have been named by the government’s Worksafe NZ as the most dangerous.  Another part of government says a big minority of employers aren’t meeting basic employment law obligations.

If that’s not enough, we’re fully in the crosshairs of the Council of Trade Unions too. . .

It’s a super trim season yes, but milk and disaster, no – Chris Lewis:

Do you know that in the first half of 2014, the amount of global tradable milk grew by an amazing seven billion litres.  That’s enough milk to fill 2,800 extra Olympic sized swimming pools and it was available for export.  It goes to explain why Fonterra cut this season’s forecast payout by a $1 per kilogram of milksolids (kg/MS).

It would be nice if our politicians realised that farmers have good and bad seasons but they don’t.  All the spending promises seem to assume we’re constantly swimming in greenbacks.  We aren’t.  It is also why anyone, whether a Kiwi or a foreigner, who looks at a farm like a get rich quick property scheme will likely end up come a cropper. 

A farm is your business and your home.  This is why farmers are passionate about what we do and that makes us go the extra mile.  It is why I take exception to the line ‘milk and disaster’ being applied to dairy.  It is super trim season yes, but milk and disaster, no. It is great to see the latest GlobalDairyTrade average still in the US$3,000 a metric ton range but that slight 0.6 percent fall means we are on exactly US$3,000. . .

 High pin bones too prevalent in NZ – Yvonne O’Hara:

New Zealand has a rump angle problem, says Holstein Friesian classifier Denis Aitken.

As well as being a dairy farmer who is trying to retire, Mr Aitken, of Maungatua, is a member of the World Holstein Friesian Federation Type Harmonisation working group. He spent some time in Denmark attending its two-yearly meeting in May.

The working group was seeking to standardise or ”harmonise” 18 different physical traits in Holstein Friesians by classifying or precisely defining the ideal of each of those traits and promoting the evaluation system. . . .

Young Agricultural Professionals Are Driving Agricultural Development – Food Tank:

Young Professionals for Agricultural Development (YPARD) is a global network of young agriculture and development professionals who are coming together to create innovative and sustainable agricultural development. YPARD enables its young members to share knowledge and information, participate in meetings and debates, promote agriculture among young people, and organize workshops.

Food Tank interviewed Rebeca Souza, a YPARD representative in Brazil, to discover what YPARD members have been accomplishing.

Food Tank (FT): How did you become a representative for YPARD?

Rebeca Souza (RS): Last year, I was doing an internship at the U.N. Food and Agriculture Organization (FAO). Three other interns and I decided to organize an event calling on young professionals to share innovative ideas to overcome world hunger and malnutrition. YPARD was one of our partners, and Courtney Paisley, the director, was attending our event. I came to her asking if I could be a country representative in Brazil since no one was appointed to this position yet. She said yes! . . .

 


Rural round-up

August 20, 2014

Waitaki River group objects to planned changes:

The Canterbury Regional Council is promoting changes to give growers and Meridian Energy, which runs the Waitaki hydro-power scheme, certainty of water supply.

But a Waitaki River users group says a deal to drop the river’s minimum flow would badly harm an already sick river.

The Canterbury Regional Council is promoting changes to give growers and Meridian Energy, which runs the Waitaki hydro-power scheme, certainty of water supply.

The plan includes a cut to the minimum flow by a third during a dry spell. . . .

Shark finning to be banned from 1 October:

A ban on the finning of all shark species within New Zealand waters will take effect from 1 October this year, Conservation Minister Dr Nick Smith and Primary Industries Minister Nathan Guy announced today.

“Implementing this ban has happened much faster than originally proposed. It reinforces New Zealand’s strong international reputation for sustainability and protecting our natural environment,” Dr Smith says.

The Ministers released a revised National Plan of Action for the Conservation and Management of Sharks (NPOA-Sharks) earlier this year, which included a commitment to phase in the ban on shark finning in New Zealand by October 2016 at the latest. A first tranche of shark species was to be covered by the ban from 1 October 2014, a second tranche from 1 October 2015, and only the highly migratory blue sharks was to be left until 1 October 2016. . . .

Botulism scare prompts diary working group:

Last year’s botulism scare has prompted the creation of a new working group in the dairy processing sector.

It was one of the recommendations of the independent Government inquiry into the whey protein concentrate contamination, which sent shock waves through New Zealand’s dairy industry.

The inquiry highlighted a shortage of experienced people with processing expertise and so the group has been set up to fix that.

The working group will be chaired by Northland dairy farmer and former Fonterra board director, Greg Gent, who said it was an exciting project. . .

NZ software could scupper mouse outbreaks:

A New Zealand-designed software system designed to predict and tackle mouse outbreaks is being trialled in Australia.

MouseAlert is an interactive website which uses mapping technology to enable arable crop growers to record and view mouse activity in their local area in real time.

Landcare Research has been providing the expertise on building this information into computer models which can then forecast plagues of mice. . .

Farmers welcome GlobalDairyTrade stabilisation:

Federated Farmers is pleased to see stabilisation in the latest benchmark GlobalDairyTrade (GDT) online auction result but warns price volatility will likely continue until well into the last quarter.

“It is great to see GDT average still in the US$3,000 a metric ton range but that slight 0.6 percent fall means we are on exactly US$3,000,” says Andrew Hoggard, Federated Farmers Vice-Chairperson.

“It seems to underscore how similar this season is to 2012/13. At a similar point two seasons ago, the average winning price was just US$54 more except it had come up from the high 2,000’s.

“But before anyone traipses back to the beginning of the year to make a more dramatic story, any price before 1 June is completely irrelevant when you are talking about this 2014/15 season. . .

 

China dangerous market reliance or exciting market growth? – Andrew Watters:

The economic growth of China over the past four years has resulted in huge demand for New Zealand dairy and meat products; lifted our terms of trade to historical highs and provided a major fillip to agriculture and the wider NZ economy.

However the somewhat dramatic slide in global dairy prices since their peak in midFebruary has the appearance of China exiting the market causing demand to stall.

It has prompted several commentators to ponder whether exciting market growth has become market over-reliance.

At MyFarm we see ‘China growth’ as a major boost to farming industry returns – one that will have a profound affect for the next two decades. . .

 

Informercials used to sell NZ meat in China - Dave Gooselink:

TV shopping shows and infomercials have become a popular way of selling everything from exercise equipment to kitchen and beauty accessories. But one New Zealand company has struck gold in China with a very surprising product – packaged meat.

It’s home shopping as most Kiwis will be familiar with, but the Chinese shopping show is selling something a little unusual – prime cuts of New Zealand beef and lamb.

Most of us Kiwis, we’d never think about buying our lamb or beef on a TV shopping channel,” says Silver Fern Farms head of sales Grant Howie. “But in a 30-minute slot earlier this year, we sold 12.5 tonnes of our beef.” . .  .

Minister approves Marlborough coastal plan changes:

Plan changes to enable three new salmon farms in the Marlborough Sounds were signed off today by Conservation Minister Dr Nick Smith at a function at the Marlborough District Council with Mayor Alistair Sowman and representatives from NZ King Salmon.

“These three new salmon farms at Waitata and Richmond in Pelorus Sound and Ngamahau in Tory Chanel are hugely important to Nelson and Marlborough’s aquaculture industry and wider economy. They will enable NZ King Salmon to grow its products from the current 6000 tonnes per year to 9000 tonnes per year in 2015 and 13,000 tonnes per year by 2033. These new farms will grow our GDP by $120 million per year, our exports by $50 million and employment by 150 new jobs,” Dr Smith says.

“I am well satisfied that our region can maintain the conservation and recreation benefits of Marlborough Sounds while enabling the growth of the aquaculture industry. These three farms will take up only about five hectares of surface water space out of a total area of over 100,000 hectares in the Sounds, or less than 0.01 per cent.” . .

The forest safety battle is not yet won

Point scoring in the media will not make our forests safer places to work, says the Forest Owners Association.

“The unions are claiming credit for a sudden reduction in the fatality and serious accident rate and Worksafe NZ is slamming us for a lack of safety leadership. These comments are unbalanced and unhelpful,” says association president Paul Nicholls.

“Political posturing and blaming others won’t save workers lives. To transform the industry’s safety culture, participants will need to acknowledge their past shortcomings and to share experiences and knowledge. They are less likely to be open to this if they are being publicly pilloried.” . .

Implementing Reform:

The sweeping reforms to the ways water is managed, as recommended by the Land and Water Forum two years ago, are now beginning to be implemented. The final shape and rate of reform will be very dependent on what government is elected in a few weeks. Therefore this is a particularly apt event looking at policy reforms that could reshape the way we manage and think about water.

“Implementing Reform” is the theme of the Water NZ annual conference being held at Hamilton’s Claudelands convention centre in the final week of the election campaign – 17 – 19 September.

Water reforms already implemented in Australia will be discussed in the first two sessions of the conference starting at 9.40 am on Wednesday 17. . .

 

 


Rural round-up

August 18, 2014

The circus of foreign ownership - Dr William Rolleston:

The Election has suddenly sparked into life. It was not a policy, a pratfall or a stunt, but Shanghai Pengxin Group’s Overseas Investment Office (OIO) application to buy Lochinver Station.

While Federated Farmers has taken the principled position of trying to learn what the ‘substantial and identifiable benefit’ to New Zealand is of this proposed sale, others have gone off the proverbial deep end.  National has been far too dismissive of concerns being raised in some quarters. Labour has gone to the opposite end by announcing they’d block the sale, along with the Greens.  Meanwhile, NZ First will go further and stop all foreign sales of New Zealand farmland.  That seems to be the position of Colin Craig, who stepped into Mr Peters shoes by breaking this story.

What everyone seems to have forgotten is process.  Our overseas investment rules are meant to operate on fair play under the guise of the OIO.  Instead, it has turned into an election political circus. The coverage of which, has gone global, given the media who have contacted me. . .

Meat and fibre’s time to shine - Rick Powdrell:

Boy oh boy, doesn’t it feel good to be a sheep and beef farmer for once. Of course it wasn’t always that way.  We were the dairy industry for decades, almost as soon as the Dunedin slipped out of Port Chalmers in1882, we rode the sheep’s back.  The good times operated under a simple business model.  We grew meat and fibre and Britain needed it.

Through war and peace, these good times seemed destined to run forever.  Our success blinded us to what the bright sparks at companies like DuPont were doing.  That was until they ‘wool-jacked’ us with oil based fibres.  That wasn’t helped by lamb being seen in the 1970s as your grans’ meal. You could have lamb cooked anyway you wanted as long as it came in a roasting tin.  Other meats became trendier and in some instances, cheaper, while our industry was trapped in a Sunday roast.  . .

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Demand drops for malting barley – Annette Scott:

A shrinking number of Kiwi beer drinkers is creating less demand for malting barley.

As beer consumption falls, coupled with higher prices for New Zealand barley, breweries require less malt and malting companies less barley.

Marton-based malting company Malteurop NZ operations manager Tiago Cabral said New Zealanders’ drinking habits were having an impact on the company. . .

 

Worth sharing - thanks The Horse Mafia

NSW $10m beef deal with China - Roderick Makim:

NSW beef suppliers have secured a $10 million export deal to the Chinese market.

Producers including Andrews Meat Industries in Lidcombe and the Northern Co-operative Meat Company Ltd in Casino are among the NSW suppliers involved in the deal, Deputy Premier Andrew Stoner said today.

Mr Stoner announced the deal while visiting Hong Kong and Shenzhen for a three-day trade mission along with representatives from a range of NSW food companies. . . .


Rural round-up

August 15, 2014

Commission releases draft report on 2013/14 review of Fonterra’s base milk price calculation:

The Commerce Commission today released its draft report on Fonterra’s base milk price calculation for the 2013/14 dairy season. The base milk price is the price Fonterra pays to farmers for raw milk.

The Commission is required to review Fonterra’s calculation of the base milk price each year as part of the Dairy Industry Restructuring Act’s milk price monitoring regime. The review assesses if Fonterra’s calculation approach provides incentives for it to operate efficiently and provides for contestability in the market for purchasing farmers’ milk.

The scope of the Commission’s review is only to look at the base milk price, not the retail price that consumers pay for processed milk. . . .

 

Fonterra’s farmgate milk price out of step with efficiency – Pattrick Smellie:

 (BusinessDesk) – The Commerce Commission says Fonterra Cooperative Group’s decision to cut the last season’s forecast payout to farmer shareholders by 55 cents per kilogram of milksolids below the result produced by its Farm Gate Milk Price calculation is not consistent with the milk price regime’s intention to make Fonterra operate efficiently.

However, it says the decision – the first ever taken to vary the payout from the calculated level since the Farm Gate Milk Price regime came into force in 2009 – was consistent with ensuring competitive provision of milk to alternative suppliers, the commission concluded in its annual review of the regime.

Under the Dairy Industry Restructuring Act, which allowed a merger to create Fonterra despite creating a dominant local market player, the commission must monitor how Fonterra sets the price it pays farmers for milk as part of efforts to ensure it’s possible for local dairy market competitors, such as Synlait or Westland Milk, to emerge.

Under the monitoring and reporting regime, the commission has no ability to force any change on Fonterra. . .

 

Latest dairy farm visits reveal poor record keeping:

The Ministry of Business, Innovation and Employment’s Labour Inspectorate has released the results of the third phase of its national dairy strategy, which involved visits to farms that employ migrant workers.

The findings show that while no exploitative conduct was found, a quarter of the farms visited were in breach of employment laws for poor record keeping.

Senior Labour Inspector Kris Metcalf says the visits were part of a long-term operation to check compliance with minimum employment obligations at dairy farms across the country.

“The majority of the 42 dairy farms visited in this phase were meeting minimum employment standards,” says Kris Metcalf.

“However, 11 farms were found to be in breach of their minimum employment obligations which is disappointing. . .

Government migrant dairy worker survey highlights procedure hole:

Following the third phase of the Ministry of Business Innovation and Employment’s (MBIE) dairy strategy, focussed on migrant workers, Federated Farmers knows a sizable minority of farmers still need to meet basic employment law and the Federation is offering to help.

“The latest information from MBIE shows that there has been a significant improvement in the performance of dairy farmers, but far too many are failing to take accurate time sheets seriously enough,” says Andrew Hoggard, Federated Farmers Employment Spokesperson.

“We are pleased MBIE inspectors did not find any exploitative behaviour of migrant workers on the 42 farms they visited. That said we’ve still got a bit of work to do with our guys on record keeping and basic employment practices. . . .

Softening the dairy blow:

• NZ dollar is under pressure
• Interest rate predictions delayed
• Meat sector outlook remains bullish

While eleven of the last twelve dairy auctions have recorded price falls, the sheer magnitude of the falls is bringing other factors in to play, according to the latest ASB Farmshed Economics Report.

“With dairy prices down by 37 percent on a year ago, the NZD has finally come under some pressure” says Nathan Penny, ASB Rural Economist.

“The NZD has passed its peak. We expect the NZD to trade at around 85 US cents for the rest of the year.”

“The dairy price falls are also a major reason why we’ve pushed back our interest rate call.” ASB Economics now expects the next OCR increase in March 2014 rather than their previous call for a December 2014 hike. . .

 

Working group for dairy processing sector:

Primary Industries Minister Nathan Guy has announced the establishment of a working group to develop a ‘roadmap’ on how to meet the future capability needs of the dairy processing sector.

“This was a recommendation of the independent Government Inquiry into the Whey Protein Concentrate (WPC) Contamination Incident last year. It found that our food safety regulatory model for dairy is among the best in the world, but also recommended improving people capability to strengthen the food safety system.

“The inquiry highlighted the shortage of experienced people with processing expertise across the industry’s regulatory sector, and at all levels of the system. . .

 Does Australia want to compete? – Jo Bills :

Recently the Business Council of Australia released a report it commissioned from McKinsey & Co – Compete to Prosper: Improving Australia’s global competitiveness.

It was fascinating reading – taking a helicopter view of the Australian economy and the global competitiveness of industry sectors.

Most of us probably regard Australia as a trading nation, but the McKinsey analysis highlights the fact that our economy remains quite inwardly focussed – while we are the world’s 12th largest economy, we rank 21st in terms of global trade – well behind some that you might assume we should be ahead of.

As part of the study, the McKinsey number-crunchers developed a Relative Competitiveness Score, applied it to all sectors of the Australian economy and found that only one sector – agriculture – stood out as truly competitive. . .

Boost for wilding tree control in Waimakariri:

A group of volunteers dedicated to clearing wilding trees around Flock Hill in upper Waimakariri is to receive a major funding boost, Associate Conservation Minister Nicky Wagner announced today.

Waimakariri Ecological and Landscape Restoration Alliance will receive $309,000 over the next three years from the Department of Conservation’s Community Conservation Partnership Fund.

“Wilding trees are now the most significant threat to biodiversity and infrastructure in the 60,000 hectares of public and privately owned lands in the upper Waimakariri Basin. . .

Forest contractors welcome WorkSafe submission:

Today the government’s safety agency for forestry, WorkSafe NZ, has publicly released its submission to the panel of the Independent Forest Safety Review. The Forest Industry Contractors Association (FICA), the industry group that originally initiated the review, has welcomed the comments from the regulator.

“We’re pleased that some vital issues have been highlighted by Gordon MacDonald’s WorkSafe NZ team,” says spokesman John Stulen of the Forest Industry Contractors Association, “They’ve made some very practical observations vital to making change in our industry.”

Stulen says WorkSafe NZ has been open and frank in their criticism of some shortcomings, yet has also been constructive at the same time. . .

Feed Partnership Set to Shake Up South Island Mag Regime:

South Island dairy farmers can now reap the rewards of a revolutionary new Magnesium product, which is transforming Magnesium use in dairying.

Animal feed ingredient supplier, BEC Feed Solutions, is partnering with South Island animal feed manufacturer and blender, James & Son (NZ) Pty Ltd, to give the region’s dairy farmers convenient access to its Bolifor® MGP+ product.

Bolifor® MGP+ is a unique alternative to messy pasture dusting and laborious daily drenching, and contains the essential minerals Magnesium and Phosphorus in the one product. It’s anticipated thatBolifor® MGP+ will be well received in the South Island, given that farmers, vets and animal nutritionists are observing an increase in Phosphorus deficiency due to the region’s dependency on fodder beet crops and changing land use. . .


Water policy attack on rural NZ

August 11, 2014

Environment Minister Amy Adams says Labour’s water tax is a pointed attack on rural New Zealand and small businesses that operate there.

“Labour is suggesting that rural New Zealand should pay taxes that no other New Zealander has to pay and should abide by rules that other water users aren’t subject to,” Ms Adams says.

“In fact, under Labour’s plan, the productive sector could be hit with a $60 million bill for every one cent of tax Labour imposes per cubic metre of water.

“You have to ask why Labour is looking to penalise farmers and small, rural businesses by making them and only them pay for water use when the issue of water quality is one that applies across urban and rural New Zealand.

“It’s an out-and-out attack on rural and provincial New Zealand.

“Only a few days ago Labour was claiming they supported small businesses. However, Labour’s water tax, which they are hiding the amount of, would cause real damage to hundreds of small, rural businesses in the productive sector.

“It’s not just costs dairy farmers would have to bear. Sheep and beef farmers in Canterbury, apricot growers in Roxburgh, market gardeners in Pukekohe and kumara growers in Dargaville could all be hit by Labour’s water tax.

“As Irrigation New Zealand points out, an equitable and affordable water tax will be impossible to implement and will cost a fortune to establish.

“If it was really about ensuring efficient water use, why is every other commercial water user, except farmers, exempt?

“A water tax will increase the cost of production which could mean higher costs for New Zealanders for products like milk, cheese and fresh vegetables.

“Improving the quality of our freshwater is important to us all but we must do it sensibly so it doesn’t cost thousands and thousands of jobs across regional New Zealand and impose millions of dollars of costs on communities.

“National’s plan will improve and maintain the economic health of our regions while improving the health of our lakes and rivers at the same time.

“With policies like this, Labour might as well give up the pretence that they care about rural and provincial New Zealand and the small businesses that are at the heart of these areas.”

Labour plans to tax “big” water takes but only those in the country that are used for irrigation.

If water has a taxable value for irrigation, why doesn’t it have a one for other big takes – like power generation and urban water supplies?

Labour isn’t going there because that would be too cost them far too much support.

For all they keep talking about supporting the regions they know they’ve got hardly any support there so it doesn’t matter to them that the tax will add costs to farming.

Unfortunately, while doing that,   it won’t contribute to their aim to clean up waterways:

. . .  IrrigationNZ does not believe that imposing an irrigation tax will lead to New Zealand’s rivers and lakes becoming swimmable.

“This policy fails to recognise the complexities of freshwater management in New Zealand and ignores the billions of dollars of on-farm capital investment which has been put into improving our waterways,” says Andrew Curtis, IrrigationNZ CEO. “A ‘fair and affordable’ variable rate water tax will be impossible to implement and will cost a fortune to establish,” he says. “In no other country in the world is irrigated water paid for through a tax.”

“There is much about Labour’s water policy which aims to yield the economic and recreational benefits of New Zealand’s water for all, this is good, but punishing irrigators by imposing a water tax is not the way to achieve this.

“The only robust and long term solution to restoring waterways is on a case by case basis engaging local communities to find solutions.

“It is time that the value of irrigation in terms of food production and creating jobs is recognised in New Zealand, as it is in every other part of the world. There is considerable public good gained from sustainably managed irrigated agriculture.”

IrrigationNZ would like to point out the following:

• Horticulture and viticulture is not possible in New Zealand without irrigation, therefore an irrigation tax will increase the cost of production and will be passed onto the public when they buy their fresh produce;

• irrigation in New Zealand is not free: irrigators pay for a water permit, pay to be part of an irrigation scheme, and operate within strict limits;

• it is inequitable to single out irrigators when hydro generators, commercial users and urban user will not be charged for their water takes;

• a charge on irrigators will reduce money available for mitigating environmental impacts;

• agriculture has been the backbone of this economy through what have been very challenging economic times globally – everyone has benefitted and now everyone needs to be part of the solution for cleaning up our waterways.

INZ is committed to finding a way for New Zealand to develop sustainably managed irrigation schemes within acceptable environmental limits.

“Water is our most valuable renewable resource and we believe that irrigation in New Zealand is essential to protect against climatic variations and to enhance the country’s ability to feed its population and to contribute to feeding the world,” says Mr Curtis.

Federated Farmers says its a thinly disguised anti-farming policy:

Federated Farmers is asking why the Hon David Cunliffe is talking about helping regional economies on one hand, while announcing new taxes on those same regions to knock them back on the other.

“This is a thinly disguised anti-farming policy that is trying to blame farmers and particularly farmers who irrigate, for all of New Zealand’s water problems,” says Ian Mackenzie, Federated Farmers Environment spokesperson.

“It is clearly misguided and worse it is opening the divide between town and country when we should be working together.

“They know they cannot bring all rivers and lakes up to swimming standards without rebuilding all urban storm water systems and clearing New Zealand of wildfowl at all, let alone, in 25 years.

“Taxing irrigators in Canterbury and Otago to fix up degraded waterways in other parts of the country seems patently unfair.

“As for the practical effect of their anti-farming Resource Rental policy, it can be summarised in Northland, Auckland and the Bay of Plenty as being principally a tax on horticulture.

“In Marlborough and I guess in parts of Hawke’s Bay plus Wairarapa too, it is a tax on grapes as well as fruit and vegetables.

“For the rest of us, it is a tax on wheat, vegetables and pasture production.

“Independent economic modelling indicates that a Resource Rental on water at one-cent per cubic metre of water takes $39 million out of farms and provincial economies.

“This is all money that farmers are currently spending on protecting rivers and streams. Money that is making the towns of Ashburton, Pleasant Point and Oamaru places of employment for thousands of people. The same provincial economies that David Cunliffe wants to help.

“I don’t understand how you can help those towns by punitively taxing the one thing that has driven some prosperity in those regions.

“The Greens want to beat up dairy farmers, Labour wants to do it to irrigators. When will these people realise that others in New Zealand take and pollute water as well.

“Irrigation may take 57 percent of water used but residential and industrial users take 43 percent according to Labour’s own source document. It seems a bit one sided to continuously blame only one sector of the community for effects caused by everyone.

“As New Zealanders we need to collectively own up to our responsibilities and work together if we are to make a difference.

“Farmers have done that. It is time Labour and the Greens recognised that and argued for policies that encouraged the rest of New Zealand to do so too,” Mr Mackenzie.

A general charge would impose costs on production which will affect profit margins or be passed on to consumers in higher prices for food.

It will also be imposed on those doing all they can to keep water clean – which is the majority of farmers – rather than directly targeting the few who don’t.

Water didn’t get dirty overnight.

It will take time to clean it up but good work is being done already with co-operation between farmers, milk companies, councils and community organisations.

That work won’t be helped by labour’s policy which is merely another of their anti-farming taxes.


Rural round-up

August 8, 2014

 Anti-foreigner stance ‘short-sighted’:

A New Zealand farming leader says he’s frustrated that a range of political parties are targetting foreigners and saying they shouldn’t be allowed to buy farms.

Federated Farmers vice president Anders Crofoot bought Castlepoint Station in Wairarapa after moving to New Zealand from the United States in the 1990s and went through the Overseas Investment Commission to do so.

The Labour Party has said that if it wins the general election sales of rural land to most foreigners will be banned. . .

Dairy farm purchase boosts employment -

The purchase of a North Otago dairy farm by a company founded by a South Canterbury businessman will create more local jobs, the company says.

Craigmore Sustainables has received Overseas Investment Office approval to purchase a dairy farm in Tussocky Rd, months after buying three other farms in North Otago.

Craigmore is the brainchild of South Canterbury businessman and farmer Forbes Elworthy and is based in London. It also has offices around New Zealand.

“We have an extensive development programme in place for this property, including building a dairy shed, new effluent system, and native planting to assist with nutrient management,” the company’s director of commercial development, Hamish Blackman, said. . .

Lochinver owners want sale money for development – Patrick Gower:

The Kiwi seller of Lochinver Station is a century-old Kiwi business and wants to use the $70 million for a major property development that will help the expansion of Auckland.

Sir William Stevenson was the driving force behind his family’s business empire. He bought Lochinver Station 60 years ago, turning it from a vast wasteland into thriving farmland with 100,000 sheep.

Now, the family’s attempt to sell could be blocked by politics. Sir William’s friend Morrin Cooper says he wouldn’t like that.

“The Stevenson family deserve better than this: to be used as a chopping block just because there happens to be an election around the corner.” . . .

Trade talks failure may cost NZ in Korea:

The Agricultural Trade Envoy, Mike Petersen, is warning that farmers are in danger of losing out in the lucrative South Korean markets if trade talks fail.

The latest round of negotiations have been taking place in Seoul this week.

Last week the Minister for Trade, Tim Groser said he had given his final offer to the Koreans to resolve issues such as easing tariffs for New Zealand’s farmers, which cost exporters $195 million a year. . .

In lean times, it’s still vital to look after your workers – Chris Lewis:

The buzz about town is the revised pay-outs announced by Fonterra and Westland, which have both dropped significantly. So the pressure will be mounting this spring as farmers try to keep their heads above water. In times like these it is important to run a tight ship, not only financially but with your staff.

Stress has a way of brushing off onto those near you so look after yourself and bear a thought for your staff and your family who will not be immune to the pressure. A farm has many different aspects to it and a well cared for and oiled machine will ride out the tough times a lot smoother than one that has been roughing it or neglecting it. . .

Farmers take over yarn mill – Alan Wood:

Wool farmers have an agreement in place to buy a Christchurch yarn mill, describing the deal as a “significant” industry event to supply the carpet manufacturing industry.

Christchurch Yarns NZ went into receivership in April with the high kiwi dollar one of the challenges the business was up against at that time.

The dollar has remained stubbornly high since then and yesterday was trading around US84 cents and A90 cents.

The business was originally Christchurch Carpet Yarns and has its production facility based at a leased Sheffield Cres, Harewood property near Canterbury Technology park. . .

$3m grant boosts agri chemical research – Sue O’Dowd:

Research funding will help a Taranaki chemical-manufacturing company develop products its customers want.

Zelam is one of 52 Taranaki businesses to have received government research grants in the past three years to help them take their ideas for products and services to market.

For the next five years 20 per cent of Zelam’s eligible research costs will be refunded by Callaghan Innovation, a government agency that provides money to businesses that invest in research and development. Each year Zelam invests up to $3 million in chemistry and field trials. . .

"LA PRODUCCIÓN AGROPECUARIA EMPUJA TODA LA ECONOMÍA" Pepe Mujica – Presidente de Uruguay “No estoy de acuerdo con el dejo peyorativo, muy urbanizado, de creer que el campo es estático, que no hay progreso tecnológico ni inversión técnica. Eso es no conocer al país y, quien no lo conoce, no puede quererlo. Y es lo que más me duele”. “La producción agropecuaria empuja a toda la economía y encadena una masa laboral y de energía por los insumos que consume, los apoyos que necesita y el transporte” que requiere, aseguró el presidente oriental. Mujica explicó que las naciones avanzadas son aquellas que producen un bien al menor costo posible para venderlo al mayor valor posible. “ En cuanto al concepto de “valor agregado”, Mujica dijo que, más que la naturaleza del producto en cuestión, es necesario “tener claro cuál es el conjunto tecnológico que hay atrás para llegar a ese producto: es mucho más complejo el (mero) concepto de industrializar”. COMPARTÍ si estás de acuerdo con Pepe Mujica sobre su opinión del sector agropecuario.

The future is in the country.


Labour tries to out-Winston Winston

August 5, 2014

Labour has forgotten that is trying to out Winston-Winston Peters on sales of land to foreigners:

The next Labour Government will keep rural and residential land in Kiwi hands, Labour’s Finance spokesperson David Parker says.

“New Zealanders are sick of seeing their farms and homes sold to overseas buyers with the profits and opportunities going offshore. No overseas person has the right to buy our land.

The opportunities stay here where the land is, so do the jobs which go with it.

The profit is only what’s left after costs – including the purchase price, wages, repairs and maintenance, development and tax – are paid.

A friend is New Zealand manager for overseas investors who own several farms. That company reinvests all its profit in the farms and adds more money from other investments elsewhere for development which includes a very expensive experiment with organic farming.

Their money is making the farms better and they are putting far more into the country than they are taking out.

“In all but the rarest of cases, sales of rural land to overseas buyers will be banned. Non-resident investors will also be banned from buying existing Kiwi homes.

What will those rarest cases be and who will decide?

“Changing who owns what already exists does nothing to increase New Zealand’s output. It just sells off New Zealand’s profit stream and kills off the Kiwi dream of owning our farms and homes.

It could increase New Zealand’s output if the investment improved production.

“Labour will reverse the current approach so that overseas buyers of rural land will have to prove they will create more jobs and exports than any New Zealand investor. Given New Zealanders are among the best farmers in the world it is an extremely hard hurdle to get over.

The hurdles overseas must leap are already very high and include the creation of jobs.  Among other conditions local buyers don’t have to meet but foreigners do is allowing public access.

New Zealand farmers are very good but they often lack the capital to be even better.

“This will ensure our farms are not priced out of the reach of New Zealanders.

If that is the case it would also mean the vendor gets less to invest elsewhere.

“We will also limit the discretion of the minister to ignore recommendations from the Overseas Investment Office.

“Labour will also restrict sales of residential homes to any non-residents unless they intend to move here, helping to keep the Kiwi home ownership dream alive, especially for young New Zealanders currently locked out of the housing market.

“The National Government is ignoring the legitimate concerns of New Zealanders about New Zealand land and houses being sold to overseas interests.

These concerns are largely based on emotion rather than facts.

A very small proportion of farm land is owned by foreigners and the problems with housing are largely a result of planning restricting the supply in Auckland and the earthquakes in Christchurch.

“Instead of accusing New Zealanders of being xenophobic, John Key and Steven Joyce should respect New Zealanders’ desire to keep New Zealand land in New Zealand hands,” David Parker says.

The accusation of xenophobia is because the protest is loud when it is a Chinese buyer and quiet to non-existent when it is from other countries like the USA, Britain, Australia or Germany.

Wee parties can get away with outrageous policies because they can always use the excuse they didn’t have the numbers to get them enacted.

The bigger parties are usually more circumspect.

Labour has forgotten this in trying to out Winston Winston Peters with this dog-whistle to the xenophobic.

It is also ignoring the benefits from the sale:

Stevenson Group, the concrete, quarrying and engineering firm that owns Lochinver Station, ran an extensive tender before agreeing to sell the 13,843 hectare farm to Shanghai Pengxin and says it will reinvest the funds in other businesses. . .

 The Stevenson family has owned Lochinver for 60 years but started as a drain-laying business in 1912, expanding into quarrying and construction in the late 1930s, and making concrete blocks from 1946. The original 5,260 ha Lochinver farm was acquired in 1958 and the family expanded to 16,595 ha “breaking the wild country into farming land” with “an enormous amount of hard work.”

“Farming is not the core business of Stevenson Group,” chief executive Mark Franklin told BusinessDesk. The company is freeing up capital to invest in other businesses such as expanding its Drury quarry, he said.

Franklin said the company had “really intensive discussions with lots of people both domestically and internationally. You can be very clear, anyone who was interested, I have spoken to.”

While Lochinver has a rateable value of more than $70 million, the purchase price hasn’t been disclosed. Still, Franklin said Pengxin’s offer wasn’t necessarily the highest on price alone and his company had considered a range of factors including retention of workers and the future of the property. Lochinver was more a farm enterprise than a farm. “In New Zealand a lot of people own farms but this is part of a supply chain.”

He said Pengxin had a long-term strategy to build a vertically integrated business.

The value in the property was “in its ability to grow a lot of grass,” which made it attractive for both dairy support and wintering stock, he said. Sheep farming was likely to remain a core part of the business. . .

The owner gets a large amount of money to invest in its core business, the new owner will bring money into the country, spend more on running and improving the property which will require employing locals and using local goods and services.

Federated Farmers which supports foreign investment in general has some concerns over the sale of Lochinver.

While Federated Farmers supports positive overseas investment into New Zealand’s farming system, it is concerned the potential sale of Lochinver Station to Shanghai Pengxin Group Co. Limited, may not provide sufficient benefit to New Zealand.

“Since there is no requirement to publicly notify applications to the Overseas Investment Office, Federated Farmers is frankly uneasy about the potential sale of Lochinver Station to Shanghai Pengxin,” says Dr William Rolleston, Federated Farmers President.

“New Zealand absolutely needs foreign investment but it has to be of benefit to the local and national economy. 

“That is why a ‘substantial and identifiable benefit’ test was incorporated into the overseas investment decision tree, further bolstered in 2012 by a High Court decision adding a “with and without” counterfactual test. 

“This was to ensure any investment, such as the one being proposed, has benefit over and above just making a farm work better.  Since Lochinver Station is highly regarded in farming circles there must be something very special and we are keen to know what that is. . .

He might be reassured by a speech Prime Minister John Key made to Federated Farmers in 2010:

. . . I want to take this opportunity to outline the Government’s position on overseas investment and talk about the changes we are making to the approvals regime.

In summary, we recognise the huge contribution that overseas investment makes to Kiwi jobs and Kiwi incomes.

New Zealand benefits from openness, both in trade and in investment.

However, New Zealanders have legitimate concerns about some aspects of overseas investment, particularly when it comes to land.

I share those concerns.

Good policy is a matter of striking the right balance.

We have reviewed the rules around overseas investment. For the most part, we think those rules are appropriate and the overall legislation is sound.

However, we have made a few adjustments to the approvals regime and given ministers increased flexibility to consider a wider range of issues when assessing proposed investments. . .

What I want to say first is that you, as individual farmers, and as members of Federated Farmers, have been right in the middle of recent debates about overseas investment, because a lot of those debates have been about land.

I’m sure that between you, you have some strong views and quite possibly some mixed views about overseas investment.

Unfortunately, much of the debate in recent months has been stirred up by politicians who are more concerned about getting on the news than they are about well-thought-out policy.

We are likely to see more of this tub-thumping and political posturing in the lead-up to next year’s election.

Politicians who were unwavering advocates of trade and investment when they were in government have somehow turned into defenders of Fortress New Zealand while in opposition.

Their views appear to have changed 180 degrees, for the sake of politics.

That is a shame, because at stake here are New Zealand jobs, New Zealand incomes, and New Zealand futures.

The reason we allow investment to flow between countries – both into New Zealand and out of New Zealand – is because it benefits New Zealanders.

We don’t do it for any other reason – we do it because we benefit from it.

In particular, overseas investment in New Zealand creates jobs, boosts incomes, and helps the economy grow.

Overseas capital can make things happen here that wouldn’t otherwise happen, grow businesses that wouldn’t otherwise have the means to grow, create jobs that otherwise wouldn’t exist, and pay wages that are higher than they would otherwise be.

Overseas capital makes New Zealand a vastly more productive country.

So there is absolutely no way we could enjoy the standard of living we do without overseas investment.

And part of that standard of living is being able to afford the education, law and order, and health services that our families want.

A recent study concluded that overseas investment in New Zealand lifted national income by around $5 billion between 1996 and 2006. That is an estimate of the return to New Zealand from overseas investment, over and above the cost of paying interest and dividends on that investment. . . .

He gave examples from the wine industry.

Since the year 2000 the number of wineries in New Zealand has almost doubled, and the industry directly employs 6,000 people.

This expansion of the wine industry into one of our most important export industries has largely happened because of overseas investment.

That investment has not just been into big producers, like Montana, but smaller wineries like Craggy Range, Sacred Hill, Dry River and Te Awa.

Overseas investment has allowed the industry to grow exponentially, and also develop from being a small and family-based sector into a more capital-intensive and technologically-advanced industry with real global connections.

Overseas investment also plays a positive role in New Zealand agribusiness, providing a vital source of capital for ongoing expansion and growth. PGG Wrightson, Synlait, CRV Ambreed and Anzco are good examples of such investment. . .

He also pointed out investment is a two-way street.

New Zealand businesses and individuals are themselves investing abroad.

There has been considerable investment, for example, by New Zealand dairy farmers in overseas farms. Fonterra, of course, has processing facilities in a number of different countries.

A free flow of investment also allows New Zealanders to diversify their savings across different countries and different industries. Most of the savings that are in the Super Fund, for example, and in many KiwiSaver funds, are invested overseas.

In fact, the total amount of equity investment into and out of New Zealand is surprisingly balanced. According to the latest figures, New Zealanders have around $53 billion of equity invested abroad while overseas investors have $61 billion of equity in New Zealand.

So international flows of investment – both into and out of New Zealand – are very important for our standard of living. . .

Then he addressed concerns about foreign investment:

I’m sure most people have these concerns from time to time, because as New Zealanders we have a very real and very profound sense of attachment to the land.

For one thing, our economy is based on agriculture so we recognise and respect that the land has an important economic value.

We also have a strong tradition of aspiring to own land – our own house, section, lifestyle block, farm, or block of native bush. We are not entirely comfortable as tenants – we want to put our roots down and call some place our own.

We also value outdoor pursuits – tramping, hunting, fishing, camping and picnicking – and even when we don’t do those activities, we like the fact that we could if we wanted to.

Our tourism marketing is very focused on New Zealand’s natural beauty, and we’re proud of it.

I have recently said myself that we don’t want to end up in a position where New Zealanders are tenants in their own country.

So I think the fact that people are concerned with overseas ownership is perfectly legitimate.

But we should be careful not to let those concerns get out of hand.

For a start, about a third of New Zealand – including our most iconic land – is protected by being in the conservation estate. So no-one from overseas can come in and buy Mt Taranaki or the Franz Josef Glacier, for example.

Second, it is a simple fact that land can’t change nationality. People can change nationality, of course, and factories can be relocated overseas. But a piece of land in New Zealand will always be here in New Zealand.

Because it will always be here, the use of that land will always be subject to New Zealand laws and regulations. And ultimately we as New Zealanders get to determine what those laws and regulations will be.

Third, and contrary to what some people might think, there hasn’t been an acceleration of overseas sales in recent years.

In fact, as at a couple of days ago, only 11, 203 hectares of land has been sold so far this year. That is certainly well below the peak of 380,000 hectares that were sold in 2006.

Fourth, the issue of whether businesses and properties are owned by New Zealanders or people from overseas, is for the most part, squarely in our own hands.

What I mean is that no-one can be forced to sell their business to an overseas investor, just as no farmers can be compelled to sell their land to foreigners.

Obviously with mortgagee sales or receiverships things get a little more complicated but, in general, people who feel very strongly that New Zealand-based assets should remain in New Zealand hands are free to sell only to New Zealanders.

The problem is that it’s people who don’t own the land who are complaining and wanting to dictate to whom the owners can sell.

Moreover, New Zealanders can always buy land and other assets back. What makes that difficult isn’t the rules around overseas investment, it is the fact that New Zealand has a poor savings record and therefore a relatively small stock of capital available for investment.

If, as a country, we saved more, we would own more of the assets in New Zealand, including land, as well as being less in debt to overseas lenders.

Finally, there are specific safeguards contained in the Overseas Investment Act and in the regulations which the government makes under that Act.

Over the past year or so the Government has been reviewing this system of rules, to make sure we have got the balance right between three key objectives:

welcoming desirable investment, in recognition of the benefits it brings for New Zealanders

providing a stable investment environment, where the rules are settled and everyone is clear about what they are; and

addressing public concerns about overseas investment, particularly in regard to land.

This review has come to three conclusions.

The first conclusion is that the Overseas Investment Act is a fundamentally sound piece of legislation.

The Act makes it clear that it is a privilege for overseas people to own or control sensitive New Zealand assets.

In particular, it lays out that foreign investment in land is only acceptable if it substantially benefits New Zealand, according to a range of factors which include, among other things:

  • the creation of new job opportunities in New Zealand
  • the introduction into New Zealand of new technology
  • increased export receipts for New Zealand exporters
  • the introduction into New Zealand of additional investment for development purposes
  • increased processing in New Zealand of New Zealand’s primary products
  • protection of native bush and other indigenous vegetation; and
  • protection of game species and walking access.
  • In addition, farm land has to be offered on the open market so that New Zealanders can bid for it as well.

These are very stringent criteria.

In fact, these are the very same criteria that Phil Goff was trying to pass off as brand new policy a few weeks ago. I welcome his endorsement of the current provisions of the Overseas Investment Act which, of course, was passed by his government back in 2005. . .

The third conclusion we came to was that a couple of additions should be made to the existing rules.

These additions would make sure that all public concerns about overseas investment, both now and in the future, could be covered off under the rules.

So the Government is adding two more factors that ministers must consider when they assess the benefits of a proposed overseas investment in New Zealand land.

The first new factor is very wide-ranging and looks at whether New Zealand’s economic interests will be adequately promoted by overseas investment.

This will allow ministers to consider, for example, whether any of our key exports are in danger of being controlled by an overseas entity, or whether there are non-commercial motivations driving a proposed overseas investment.

The second new factor is a “mitigating factor” which looks at whether the investor has a meaningful commitment to New Zealand involvement in the running or oversight of the investment.

That could include, for example, part ownership with New Zealanders, appointing New Zealanders to the board, or listing on a New Zealand exchange.

These two new factors will be weighed up alongside all the existing factors when ministers consider applications for investment.

We are also going to outline the Government’s policy on foreign investment more clearly by amending the Directive Letter issued to the Overseas Investment Office.

This will make things clearer for both the Office and for overseas investors.

So in conclusion can I stress that we allow overseas investment to flow between countries – both into New Zealand and out of New Zealand – because it benefits New Zealanders.

With the appropriate checks and balances in place, this investment is good for jobs, wages and growth.

After reviewing the overseas investment regime, and making some amendments to it, the Government is satisfied that we do now have the appropriate checks and balances. . .

National strengthened those checks and balances.

Foreign investors must jump very high hurdles and if they don’t meet the conditions imposed on them by the OIO – conditions which are strictly monitored – they cannot keep the property.

The Overseas Investment Office has yet to make its decision on the sale of Lochinver.

If it does approve the deal, the strict criteria it must apply, made stricter by National, will ensure that the benefits to New Zealand are greater than any which would come from the sale to a New Zealander.


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